The Decentralization Revolution: Tech Needs Human Resilience - Jake Brukhman | CoinFund

Transcript

Jake, welcome to the Human Protocol podcast. >> Hey Simona, thanks for having me. Nice to be here. >> So, um we were having a little bit of a catch up before we started, so let's dive right in. The Human Protocol uh podcast, the idea with all of this came from wanting to hear the human side of building all of the big things, particularly from people who have been in this journey for a minute, and I always start with a little bit of background personally who you were before you got into um this exciting and wonderful space. So, I want to hand it over to you. I want to know

what the journey was until the kitchen table, which we will get to. >> Sure. Cool. Thanks. I'm happy to give a little bit of background. So, so I was born in the Soviet Union in St. Petersburg, Russia, and I actually have now spent like the vast majority of my life like not there, >> Mhm. >> but this was, you know, the first six or seven or or so years of my life. So, I came to the US with my parents. So, we immigrated in 1990, and you know, started to build our life here. My dad was a kind of physicist by training, quickly became one of the first computer programmers like in the '90s on Wall Street. Mom studied had studied computer engineering. She was also working in a

similar field. So, my family was like pretty technologically advanced for the '90s. We had a computer in our house in I think like 1990 or 1991, and it was a a Sun Sun workstation. It was a pretty serious computer for the time. Um we were on the internet in 1994 with Alex Bulkin, who was studying at NYU, who was actually my original co-founder at Coinfund, but that was like the first time that I got online was through like the NYU, and then, you know kind of grew up here studied math and computer science. I learned how to code pretty early my you know my parents basically yeah they basically like taught me C on that computer and when I was like 14 and did a lot of just coding by myself as

well kind of growing up and you know I kind of like when I got online I never really like got off after that. So and then I studied say computer science in high school. We had like a C++ course and then I went to study computer science and math at university which was for me university honors program followed by NYU Courant Institute of Mathematical Sciences where I was studying more like the the pure math stuff and you know when I kind of got out of there I was like where where did I do where did I go work I need to go make money. I was kind of had this idea that I would maybe be like a math professor or something.

>> Okay. >> At some point early but I quickly realized that was like not really going to >> a non-starter. >> Yeah it's not going to like work for me for various reasons not the least of which is that math is like really freaking hard and I I kind of like reached my limit of what I can do in theoretical math but you know and so I started working I worked in company that was basically kind of a startup hedge fund which really loved the idea of being a quant hedge fund. >> Okay. >> But needed people and you know algorithms and stuff so my first job really was like a dream job was basically sitting around reading books about quant trading and learning about quant trading and then implementing

quant trading algorithms actually doing it. >> Okay. What year is this? >> This is 2008. >> Okay. >> Right before This is right before the financial crisis. >> So that was like my intro to working in finance is like getting a job in I I it was May 2008 and then like living through the financial crisis in August. >> Okay. >> And then kind of leaving there and joining High Bridge after a couple years at High Bridge, a more serious hedge fund where I worked on the basically global trading team and also a little bit with the with the quant team, but mainly sort of doing the uh global trading technology there and and also

interfacing with the trading floor um and then, you know, leaving there and kind of getting getting sick of Wall Street after that and being like, "Okay, I'm just going to go to pure tech." So I ended up like working at Amazon. >> Yep. >> And I became a technical product manager and engineer at Amazon, which interestingly was in the same building as High Bridge, so I just had to like take the suit off and >> Did you go up floors or down floors? >> I don't remember, but I I definitely like started wearing shorts to work and it was great. Uh and so and then that was like my first real experience running, you know, more or less serious team. Uh we're building something that Google was already kind of had done for 20 years and Amazon was just catching

up. They were converting their sort of call us on the phone advertising for SMBs to >> Okay. >> online automated advertising. So we built the first online automated advertising platform for SMBs at Amazon and that quickly grew and was making money and the team became very big and it was like in China and Seattle and New York and >> And you were managing all of it. >> I was managing kind of the New York side of it for a bit and then we kind of split off into different projects along along the lines of that platform and I was working actually on more of like a social media project inside of Amazon.

>> Okay. >> almost like a Twitter for brands inside of Amazon, but Amazon was sort of historically, you know, not so good at social, so it didn't didn't work out, but it's okay. We learned a lot. And then, you know, and then I was kind of done with that and, you know, I went to my boss and said I am you know, I'm quitting and I'm going to become an entrepreneur and he's like really and what startup are you going to and I like I don't know yet. He's like you're you're stupid and uh and so I really wanted you know, I had this like entrepreneurial drive but not so many great ideas at that at that moment and so I while I did leave Amazon I quickly got snagged up to be CTO of another company called Trend Research which was

doing a lot of like awesome research on private technology companies and I >> Interesting. >> hired in got hired in as CTO. We were you know, doing a lot you know, technology that gave us like or surface some of the you know, private proprietary data that companies generally like don't don't publish in filings and things like that and sort of we were able to reconstruct some of their financial models and some of it was like really really awesome and then along that journey I had learned about Bitcoin actually in 2011 and you know, one of my friends showed it to me. It was a gentleman named Will who lived in Brooklyn and was a bit of a hacker and there's a famous story I've told on many podcasts at this point where you know, he kind of showed it to me and forgot about it and

later in 2017 I went to him and I was like wow you must be you know, like a Bitcoin billionaire by now and he's like Bitcoin what what's Bitcoin doing like I haven't paid attention since 2011 and I think he got so I was sort of following crypto since then and I loved it because I loved the idea of sort of self-sovereign money and trading and assets and things like this and then when Ethereum came along I was like wow this just makes so much sense you know, and then I really my entrepreneurial drive kicked in and I was like I really really want to be an investor but I also want to study all these cool technologies on the interface and the and the intersection of finance and tech and blockchains are like the perfect thing and that's where it sort of like

kicked off CoinFund. >> Mhm. Yep. Okay. So interesting a couple of things that I want us to revisit. What do you feel because it's very interesting to hear you say about obviously coming from the Soviet Union then moving to the States. I was born in Romania and then moved to the UK. >> Yes, sir. >> Do you feel in anything that you have done or how you've approached things that having and I know that you left pretty early, but do you feel there's a different layer to how you approach certain things because you have that experience and obviously your parents

very much had that experience. Where? >> Well, it became Moldova at the time. >> Yes, okay. >> Yeah. >> Yeah. >> So, so I I've, you know, growing up I've went to Kishinev as we used to call it, you know, all this stuff. Anyway, but to answer your question like yes, absolutely, absolutely. So, the the the if you kind of look at what happened between like 2011 and 2020 or something like that decade, 2020 2021. What had happened was like this was like an uphill battle for Bitcoin to kind of reach a certain mainstream acceptance where people are like, "Okay, like this is just like a thing and it exists and it does what it does and it's just going to be here and people are going to use it and it, you know, maybe even like financial institutions and it's like

it's okay, right? And that process happened because there were like a lot of early people who were like, "Wow, this is really cool and really important and we need to like educate people about this." And then there was like a lot more people who were like, "No, this is bad. This is stupid. This is not going to work. This isn't backed by real governments." And like finding all the reasons bad, you know, bad about it. And by the way, like in general, like when you have something like this where there's a lot of people pushing back, that's kind of how you know that it is probably like pretty good. It's like a thing, right? And so, I had with feeling because I think of my background. If that makes sense. So, like

>> Say more. >> So, my background is one So, when you come from the Soviet Union or any communist country, like as the Cubans down here in Miami, right? You hate them. Like you you're you're very distrustful of government. You're not supposed to like believe the government, like the government. You're supposed to like evaluate very critically like everything that they say, that they do, all of their actions. And by the way, even in America, years later in a different political system, like but under COVID in 2020, 2021, you know, we got a little bit of taste to this, right? Where, you know, our institutions are not infallible and like should be treated with a lot of skepticism and cynicism.

And and, you know, you kind of have to think for yourself a lot of times, especially in these days of social media. So, anyway, that's all a long way of saying is that my background coming from communism, I think, gave me this sort of cynicism, uh like I always have to When someone says something, I always have to like think about the opposite of it and and evaluate how I feel. And so, when people were telling me like Bitcoin's stupid, like I was like, "No, it's not. Like it's obviously a really awesome technology, and you know, you can see how if it takes off, it could be, you know, a new industry, a new asset class." And really like the reason why I'm blockchain, right, is not so much for Bitcoin, but really because I was like, "How are blockchains going to be used like in general? Like what can

these things enable, right?" And that question was even countercultural to the crypto people at the time, because the people who are saying who are sitting there with Bitcoin were like, "That's the only blockchain you'll ever need. You know, everything else is stupid. You shouldn't like right?" And so, and again, my this like cynicism kicked in, and I was like, "No, actually, like we should kind of look at Ethereum and like figure out what smart contracts are going to do and why that might be useful and things like that. >> It's that dealing with absolutes that I think potentially is has kind of created this little split in our brains because of our background. It's like we don't necessarily deal in absolutes. There's always no, but why would you say that

this is the only thing that you should believe in or why would this be the only route to something? So, to your point you always kind of verify and trust your gut a lot more versus what somebody else says. Do you find that? >> Yes. I mean, there's the famous Russian saying like trust but verify, right? >> Trust but verify. >> So, I think you know, I think like that definitely like that background and that sort of ethos is a lot of the reason why I got into why I was able to get into Bitcoin, crypto, blockchains early >> Mhm.

>> and sort of weather the the criticism, the cynicism from the other side, right? That we're all this is all this is Bitcoin is dead. Bitcoin is dead, you know, Mt. Gox like and all of that is I think also being driven by a desire to have technology create opportunities for people, which is I think like technology's job, right? Technology's job is lowering the barrier to entry to various fields so that that they are like easier, cheaper, more accessible, more democratic, more available to people. But the one area where that where technology has been super lacking is like financially, like in terms of economic opportunities for people. And

so I I'm kind of like a strong believer that also coming from that background cut with my family came to to the United States in 1990, they had sold like everything that they owned, >> Yeah. >> there. And the amount of money they had at JFK Airport when they landed was like $400, which is like, you know, maybe like $800 today or something. But still, but still like not that much, right? And it's a story of them taking those economic opportunities and and growing and and really living the American dream. So, my belief is that technology enables that that kind of opportunity for people who want to take that opportunity to have a better and it does so better than even like

>> So much better than countries. I mean, come on. There's so many conversations even in a recording for this podcast where there's this whole belief of like, actually this could in time eliminate the need for governments because, you know, they're actually not doing a great job at any of it or haven't done for a very long time, at least. And then the other angle that's important for me, for instance, again considering our common background, is the privacy element. I mean, for Romania certainly when I was there and again caught that tail end of communism, everybody was spying on everybody including, I mean, I had microphones in my phone, in our

house phone, whatever. So, the privacy element and the ability to have technology that works on that is also incredibly, incredibly important. Yeah. Okay. So, we get to you leave No, tell me the moment of the kitchen table as you as has been, let's say, shared in other writing or podcasts, but I want to know particularly with this counter or rather disbelief that a lot of people had, what made you take that gamble and really trust yourself and go be like, this is it in 2015?

>> Yeah. Well, so what had happened was that, you know, I was working as a you know, at my job and I was also kind of really getting into crypto on the side. I mean, that wasn't really a secret at work and in fact we, you know, we're studying some of that stuff like I remember I think the Coinbase Series B came across our desk even at at that time. It was like a $500 million >> Okay. >> share or something like that. And so but at some point, you know, my work became kind of uncomfortable with the fact that you know, we were like looking at the stuff on the side and they're like look, we have compliance, we have rules like we can't be trading like weird crypto tokens. That's weird.

>> During working hours. >> Well, you know, who knows, but point being is I found myself kind of at a crossroads where I had to decide like do I want to be the CTO of this company or do I want to go and do something else and my boss was like and while you decide, get the hell out of my office. And so I'm I'm so I'm like kind of fired in the middle of the work day in Manhattan. Not it was Union Square Park. >> Okay. >> And I called my dad and I was like I'm starting a crypto fund. >> She's >> And he was like and I knew by the by your voice that that's what you are meant to do at that moment and so I was like very supportive and that's true. He was.

>> Nice. >> And then and then the kitchen table came a little bit later after some work had been done to establish a a brand, you know, to establish some of our like initial white paper that I had written which doesn't exist publicly and we're thinking and then trap Basically what happened is I found myself, you know, sort of jobless and I wake up every morning and eat some cereal and just like study blockchain, like study everything that I could study about, you know, the crypto space. My girlfriend would, you know, wake up and go to work and hate me and like you know, there was there was a point where we had been Ethereum like out of out of the apartment that I was living in and it got like really really hot in the apartment. It had like pretty bad air

conditioning to begin with. This was like in Greenpoint. I like I had this cactus on my windowsill and it would like bloom flowers cuz it thought, you know, it was like a little desert. >> summer. >> Yeah. Anyway, so so then you know, went through this process of just like learning everything that we could and then I think really CoinFund started in earnest when we started the CoinFund Slack channel, which was around April of 2016. >> Okay. >> And you know, my partner uh Alex Bulkin was there, my partner Alex Felix, who's still my partner today, uh was there and a lot of the early crypto folks from everyone from, you know, the founders of Coinbase to, you know, a lot of investors, participants, you know,

were there and one of the reasons was like this was the first sort of serious effort to kind of create a group where people took crypto fairly seriously. They were like, "Wait a minute. [clears throat] Like, what's blockchain? What are blockchains actually doing? Like, can we separate the noise from the signal? Are there actually like good projects? Is there something here that could be big? Are some of these technologies actually going to be used by banks?" And so CoinFund really formed, you know, it then in the kitchen table of my apartment in Williamsburg. >> Oh, no, wait. So, this isn't the hot apartment. This is a new apartment. >> Well, I had moved, you know, the course of this from Greenpoint to Williamsburg and uh and then the kitchen table was there.

And so, yeah, I I do remember, but basically like the the founders of CoinFund at the time, we were all kind of go to work at stable. They would just show up at my apartment and we would like set up our computers and stuff around the table and and that's how it would that's how it would go. And then we got our first office in in 2017, the next year. >> Okay. So, then from this moment, considering again that you were the first or one of the very first who would actually like focus on, "Okay, let's fund crypto projects and let's focus all of our time on this.

>> Where did you feel that it really started to like ramp up? Like what what was the time frame from that first Slack channel and those very first conversations, kitchen table, office, and then >> Well, I think I think basically like we were kind of an on-ramp to the ICO >> Yeah. >> boom of 2017. >> Yeah. >> So, you know, CoinFund like officially started in July 1st of 2015. That's when our track record starts. >> Yes. >> The kind of kitchen table moment where we're like, okay, now this is going to be >> a thing.

>> You know, a real a real institutional thing um that we're going to make April of 2016. >> Okay. >> And then I think throughout 2016, we kind of got these drips of like people doing ICOs and and that turning into tokens and then those tokens trading in the market. So, we had the very very first ICO on Ethereum was a project called Augur, which was the decentralized prediction market platform like well well before its time. >> Yeah. >> You know, and and then we had this there's this this sale in I think it was November of 2016. It was called Digix and Digix was like an RWA essentially.

It was like gold-backed digital digital tokens and >> it made like a ton of sense to people. And people really liked that project. That project raised something like on the order of $10 million. It was like $7 or $8 million >> in like >> 5 minutes. You know, and that that was like one of the you know, I had like the Augur ICO, it sold out. You had you had Digix, you had the No Sis ICO. >> Yeah. >> Uh well, actually I think that was like later the following year. But you started to have these like kind of inklings that like, wow, maybe ICO things are really interesting way to form capital and and so as we got into 2017, that activity like ramped up and went on an exponential curve. And and so that was really 2017 was really the first kind of

validation that like anyone who was crazy enough to start a crypto fund in 2016, you know, actually was onto something, right? At the very least because look at the there's all these participants and they're doing it and they're growing and the number of capital the numbers in terms of capital being raised were very very big and the capital is being raised very fast and there's more and more people like coming into the space and it's like very noisy and you know, but like you can see that there's all these different verticals that are being addressed and you know, this is it really felt like like a like a movement, you know, like a new, you know, a very innovative, you know, new approach to things and I think 2017 obviously, you know, for better or worse, right? But I

think it validated the fact that, you know, our us as crypto investors like are warranted. There there should be experts who are as specialist, you know, who are looking at this technology, looking at the space, understanding how these tokens work, understanding how these deals work, you know, it was the year that like the SAFT was created by Marco Santori and cool he's, you know, now our neighbor here in in Miami, you know, and things were things were moving and like while the ICO, I think a lot of ICO propositions like didn't work out, yep, I still think that the capital formed went on to do greater and better things as often happens, you know, in these in these cycles, right? And so like would we have had DeFi if we didn't have the boom of 2017?

Would we have had Augur? Would we have had, you know, all these different projects? Or would we have had all these stable coins? >> Right. Right. And And to your point about Augur earlier, it's so many early ideas that now you see further down the line obviously because the frameworks are just a lot more established, but I can imagine cuz I felt this excitement end of 2017, beginning of 2018, but this excitement that these things are real and they are happening in the world and they can happen. That was the main thing. This isn't like Okay, to your point, some of them didn't happen, but it's this the realization that this is something that can actually make those changes in the world. And I think for

me, as a builder with bounties, for instance, that was the most exciting thing. And I think now, as we're seeing all of these this discourse on Twitter and so on, I think that excitement of that time, where people were just wanting to build, far more, or certainly in the circles that I was in and that you were in, people were genuinely interested in making the thing real versus just speculating. Did you feel that? Do you feel that that energy from that time, from people, is very different to the energy that we have now?

>> It's a really good question. I think it's nuanced because, on the one hand, I think the quality of entrepreneurs that we typically now invest in in 2026 is like way higher than the average entrepreneur quality like back of 2016, 17, 18, 19, 20, right? So, in some institutional sense, right? Like, no, it's better now. It's like you have people leaving Silicon Valley enormous businesses to like build something in crypto. But I know what you're getting at, which is that you know, it was a time that inspired people that was really, really exciting and it caused you to be like, I'm just going to I'm enabled, right? Like, I'm going to quit my job, I'm going to become a digital nomad, and I'm going to go like try to make a difference in the world,

and I think that that is fantastic. I think it's really valuable. I think they're, you know, learned a lot of lessons about capital in in that in that time, right? Like, we learned that you actually incentives are really important, right? Like, if you give all the capital up front to the entrepreneurs, it doesn't actually give them a lot of long-term uh motivation. You know, they might have short-term motivation, but long-term motivation really is a is a is something about like struggle. It's about, you know, doing something for a long time and getting a result. Look at OpenAI, you know, everyone's like, OpenAI or or a drop it. Well, OpenAI existed for 10 years right before >> Right.

>> it gotten It was toiling. It was struggling. It was, you know, trying to raise money. Like, it was doing things that didn't work, right? Like, and a decade is not a short period of time. >> And this is something that I feel is we forget that in the great scheme of things, cuz everybody kind of sometimes goes, "Oh, but we've been at this crypto thing for a minute and look, we aren't further ahead and look, we haven't done this and we haven't achieved this." And it's like, again, in the great scheme of things, 10 years is a blip.

>> Well, I'll tell you like what I really think happened >> what you really think. >> With the With the hindsight of 11 years, right? I'll tell you what I really think. I think there was I think that blockchains enabled, you know, a certain more efficient kind of capital formation >> Yes. >> that did create a lot of exuberance, a lot of like bubbles, a lot of like really wasted funding. >> Yes. >> did motivate a lot of people into into crypto. So, I think like I think like the the crypto's always been like good, bad, good, bad. It's like, well, we invented this amazing technology, robots and interplanetary systems can use to, you know, just do finance like in the universe.

>> Yes. >> And then the next thing we did is like we used it to get like really greedy and like, you know, just extract a lot of money from people and like a lot of them a lot of that money like did not result in commercially successful products and it was just like a blip and it is what it is and like and then that was like bad. But then like, the good part I think is that there's still kind of a core set of people in this industry and a core set of things in this industry that are going to work. >> Yes. >> Like from the very very beginning we knew that some of the best, you know, when I say best I mean like most commercial >> Yes.

>> uses of blockchains are going to be like these boring ones. They're going to be like payments. They're going to be like >> Mhm. >> digital stocks, right? They're going to be like bank settlements and tokenized deposits. And and all of that is actually happening since 2025. >> Right. >> We've had this massive turnaround of regulation >> Yes. >> and banks are now and institutions and enterprises are now seriously integrating blockchains like not in the forum that necessarily like we envisioned in 2017 where it was all like Cypherpunk and everyone had their own wallet. But they're doing it and I think that that is like really great for the world because at the very least it's going to create better products, better, you know, consumer banking, you know, more liquidity, like the ability to take

a loan out against your car as well as your house or like even your motorcycle or like whatever you own. You know, digitizing your assets. These are all like really important things. And the fact that they're going to be in banks to some people is like >> Is ew. >> Yes. >> Is is ew and and I, you know, even this as late as like a week and a half ago I was at a dinner in New York and you know, one of our friends was like, "Oh, I just like, you know, crypto's like financed now. I can't, you know, I can't I got to I got to To me it's like that's fine. You're like achieving commercial product market fit, commercial adoption. And the fact that banks are adopting blockchains just means that there's going to be like way more blockchains in the world. There's

going to be way more, there's going to be way more like, you know, accepted. You're going to be able to do a lot more decentralization experiments because banks have blockchains, right? And so people don't see, you know, kind of like the original CryptoPunk kind of vision I think was a little bit exuberant. That's my 11-year take, right? It was a little bit exuberant and and and I want to say that like the people that I work with at at our company and the way that we put our heads together >> Mhm. >> on this issue has been pressing. It's been like we always kind of knew that to have real adoption, like since 2018 we've been having these conversations. I got to remember like in in in January of 2018 when when the ICO bubble popped and >> Yes.

>> the SEC was just like rattling their sabers and we were all sitting there kind of like, "Oh man, like is crypto just going to get shut down completely? Like is this done, you know?" What we saw at the end of the tunnel there was like this idea that no, like the technology is still good and but for it to go mainstream, it just got it has to come to market correctly and that necessarily will involve negotiating with governments governments, negotiating with incumbents, having them like understand it. It's like a process, right? And we're finally going The most bullish thing about crypto right now is that we're finally at that process and that process will actually enable everything else. And the really sort of dramatic and difficult part of this

maturation is that we have to let go of the kind of earlier exuberance where we thought we were just going to like take over the world, right? And it's just I think the reality of blockchains is consumers don't want to use blockchains. They want They want services and they want to like get stuff done in the way that cypherpunks have envisioned, you know, privacy and smart contracts and you know, self-custody well just doesn't work for the for the typical person. >> But this is the thing and and to your point earlier, it's about normalizing it. And for most people, that comes through that approved label by existing institutions, testing it first and going, "It's okay. It's safe. Look, we

have it now, so it's okay for you." because I think with a lot of people and I very much believe that we can do all of the things that we want to do, but it's not, to your point, going to happen in the way that we've immediately thought it was going to happen as in we just remove the existing system and move everybody into the new one, but it's going to happen by getting people used to it and comfortable with it and enough integrated enough into their lives that it isn't the unknown blob in the corner that's very scary.

>> Absolutely. And and I want to say like one other thing, you know, in this category, which is that like at the end of the day, decentralization is probably one of the most important things we need to be thinking about right now for obvious reasons, right? >> Mhm. >> Those being, just for anyone who for whom this is not obvious, those being the centralizing forces of other technological innovations that we're going through, like artificial intelligence right? >> Yep. >> So, when people are running, first of all, when people are running their own AI agents, AI agents are some of the most decentralizing things, if you think about it, right? Like it's just like a little robot that's like running around the internet on your behalf and participating in my swarms of other

agents doing math breakthroughs and, you know, inferencing GPUs over here and trading models over there and making you money and like trading the stock market and there's a ton of decentralization technology that's needed to serve the technical needs of such agents. So, that's like number one. Number But, that's not even like my core thesis in decentralized AI. My core thesis in decentralized AI has been since 2022, when we published it, >> Okay. >> decentralized AI training, right? It's this idea that like, look, are you going to let these two or three massive corporations >> Right.

>> run away, you know, in the way that anthropic like just kind of maybe tried to do with >> Yeah. >> or or something or at least acted that way. >> Yep. >> Right? Are you going to let these companies centralize power in that way, centralize control over your data in that way, centralize monetization of your data of your activity, increase surveillance over you and your activities? >> Yep. >> You know, tell you what kind of art you can make or not make like whether someone can be naked or not naked in in your content. You know, etc. etc. Right?

Are you going to let that world happen or are you going to support decentralization technology where we can make the same models, even better models, and they can be publicly owned? >> Yep. And isn't it funny that everybody was freaking out about blockchain and now the AI thing is all just people are letting things run wild in those specific models that you mentioned and then nobody kind of necessarily thinks about that. >> Well, I mean I do think that in the same way that we had these kind of naysayers of crypto, we do have naysayers of AI.

We have some senators who are trying to ban it and control it. We have some who don't agree with how it's being used and a list of Right? Look, I think at the end of the day it's just like once you create a technology, like you can't really uncreate it. It's it's there. >> Yep. >> And what makes me feel better about technology is when they're open, when they're publicly accessible. Obviously, there people argue against that. I was just on a Defiant stream with Haseeb and Jesus where we're talking about some of the dangers of, you know, AI.

But again, like I just I think if you look at the if you kind of lay it all out, I think the world is generally safer when these things are open, transparent, and sort of balanced versus kind of people try to overregulate or like hide them away. And I And I And And my really my whole point in saying this is that if it were not for the crypto blockchain decentralization technology space that we've been in, you know, we wouldn't even have a response right now to this. >> They There would be nothing. It would be void and then this and nothing to counter it or not counter it, but work as a let's say as a mitigator of the risks.

>> That's right. And And it's And it takes I want to say something else, which is that like it takes work. It takes people who like truly really believe, you know, it in in these technologies because specifically with for example, the idea of training large models on a decentralized network. >> Mhm. >> I mean, we talked at the beginning of the show about how people push back on it. I have never seen smarter, you know, more critical people push back more than I've seen it than this idea being pushed back on. Like my founder Alex Long at Pluralis, when he got this idea while he was an AI PhD working at Amazon, >> Yeah.

>> like went to his boss. His boss like, this is like ridiculously He went to his university professor. The guy's like, this is never going to work. He went to a guy at Deep Mind. The guy's like, what you're proposing breaks training physics. And he writes in his Alex writes in his blog post like, my decision to continue on this journey was irrational. >> Which taking us into the human side is really interesting because I think a lot of us, particularly the ones that have been in the space for, like we say, 9, 10, 11 years, there is an irrationality to it. When you go and sit with people

who have those opinions of this is idiotic, this is not a thing, this is Where do you think that comes from? Where does it come from for you? >> I think like I well what I want to believe based on like my experiences and experience of the founders that I work closely with is that they actually kind of know deep down that that this thing is real. >> Mhm. >> And you know, it's kind of this they fight this like mental fight where, you know, people are telling them that it's bad, but they kind of like deep down know that it's good and they just kind of go for it. I mean, this is this story in this field it it's a common There's another company which just launched a 100 billion parameter model trained in decentralized networks called Macrocosm.

In their blog post they wrote like we were sitting on a panel X years ago next to an expert and he was telling us how impossible it is and after that we were we like after that panel like we went into crisis and questioning like all of our assumptions and then ended up like going for it anyway and now they kind of hold the record for largest model, you know, of the moment you know, trained in this way, right? So, like I just I I think like people just get really into these ideas and the closer they are to them, the more they sort of subconsciously understand that they're going to work just because they can sort of see that they are. And like and the people who are the so-called experts, I think what's going on there is that they end up being in these like they end up

like playing these kind of games and they get this like path dependency and then they just like don't want to think outside the box anymore. So, I'll give you an example like I think for people who are like No, no, no, no, decentralized training can only happen at large data centers with like high-end GPUs on with like super like fast links and a nuclear power plant powering the thing like you know, I think like their game is like we just have to race for AGI with the biggest GPUs and like if we do anything to, you know, to question that or to deviate from that, that is just going to like destroy us, right? And we can't we can't let that happen. We can't say that that could happen, you know, and then there's just sort of like creates like a bias.

And then what happens on the other side of that process is that like people sit down and are like, "Yeah, you're right. This is like a really, really difficult problem and who knows if we're going to be able to solve it." But then it turns out that what people have brains and will and determination and and and motivation, we can sit down and solve hard problems. And so we went from this like decentralized training thing being a completely impossible and shunned by all the experts in 2024 >> Yeah. >> to being a very, very published field in prestigious machine learning conferences including NeurIPS and ICML and ICLR and others, right? It's at the frontier of like AI research. It has serious people

looking at it. It has made like enormous breakthroughs to the point where we can now break up models and train them on commodity hardware, on consumer slow internet. We don't need data centers. It's actually looking like some of these train processors cheaper than doing it at the data center >> Yes. >> for some pieces of it. Um we're continuously optimizing that. Elon is launching, you know, rockets into space into, you know, data centers in space. Like you're telling me decentralization technology >> It's not >> to be useful like in that con- you know, just like it the whole story of this field is in the process of being like 180 degrees like overturned and the opportunity for companies who can train

a competitive or even just commercially viable AI model on these networks is going to be huge and there's only like I can the companies I can I can count them all on one hand who can do that today, right? They could they have an incredible opportunity right now. There's going to be $1 trillion. Like this is sort of like midling estimate of inference revenue over the next 5 years, you know, based on current numbers. Like, who knows how that changes in the future, right? But, like, it is a huge market for AI, right? And if you capture like 10% of that, 5%, you know, like, 1% of that, that is a huge opportunity for these companies.

>> So, because you were chatting about that little formula of these founders or people who can sit down at the table and figure out the hard problems. You said brains, will, and motivation. >> Yeah. >> What do you think, maybe that's the formula, but from your experience, what are the human qualities that make a successful entrepreneur? >> Man, I mean, look, it's it's sort of a zoology of companies and entrepreneurs out there, and like, everybody's different, and and the successes are very different. But, I think like I think like, you know, if you were to try to summarize some of the core things, I

think it's like I First of all, it's people who want to like build things versus like being told what to build or like what to do to build, right? Like, they just they have this drive to just kind of create. It's a really a very like artistic or creative like discipline where you know, I even if even if the product you're creating is like boring, it's like accounting software or something, right? You know, like you still there's like a lot that goes into it, and there's a lot of taste >> Mhm. >> that goes into that process. There's a lot of like, how do I pick the people who like help me do it, you know? Like, what does it look like to the customer?

Like Like, how do I serve Like, it's just it's such a creative thing, and so, there's just some people who will never like want to worry about that side of life. Like, they just kind of you know, they just kind of want to like work 9 to 5, or they just want to feel safe and that they're making money at some job, and they don't really care about the job. But, entrepreneurs are really care. They're like like I just I want to have like supreme like determinacy of like what I do every day. Like and the kind of >> kind of a form of control and safety in a way.

>> In a way, yeah. In a way, yeah. Exactly. And so they So that's like one thing. And then the other thing is like what I think my process Remember, I I'm not like a I'm not like a traditional VC. I became an investor by way of of crypto. >> Yes. >> And really I'm a technologist. So I'm kind of a fake VC in a sense. And you know, my sort of VC journey and training and learning as a VC was like watching like 10-11 years of people go from kind of like very nascent, early, rough around the edges, like way too technical type of entrepreneurs >> Mhm.

>> to like really, really commercial entrepreneurs now who are building payment networks and negotiating with Visa, and banks, and >> Right. And actually like do business and some of it is fake, right? So, I think the other kind of quality there is, you know, to be a successful entrepreneur, you ultimately have to be commercial because you're building a business and you have to make that business work and you have to get customers and you have to get part- partners and you have to let the governments let you do it and you know, you have to fight competitors and >> Mhm.

>> etc. etc. So, I think taking a crypto lens on this answer, right? I think the answer is like the other quality that you really need in our industry is like this kind of commercial drive. >> Mhm. >> Um you know, when I think of maybe like let me highlight one. So, Halborn is a you know, it's an infrastructure company that started on Solana and was offering, you know, sort of APIs and services that makes developers' lives easier to build on, you know, on the Solana blockchain. And you know, this is a highly commercial entrepreneur. He was able to build like a very successful sales team.

Their revenue has been ramping up over the last couple years like dramatically. They have expanded to not just Solana, but like many blockchains now, right? They like they know how to handle a customer, they know how to get contract up like it's just these skills are not necessarily a part and parcel of what the original crypto people are like used to do or used to doing. >> Mhm. >> But that's what is succeeding now in this environment. Creating product market fit, traction, revenue, get customers like the you know, just that's sort of what the market is demanding of these products today.

So that's another one and then I mean I would say like the other thing is just kind of taste and you know, some entrepreneurs are just love their products and love their teams and they do it with a certain like >> Where >> this flare. Yeah, like this is not drudgery for that like I think about you know, Constantine at Blockdaemon who you know, for having so much white hair has so much energy every day that he like brings to to the job and his team and like and he's been doing it for 10 years now.

>> Yeah. Long time. >> Blockdaemon. So you know, I just think about entrepreneurs like that and just never ceases to amaze me. >> What? Was there ever a moment where you thought, particularly because bear markets and all of that and in this stretch of time that we both been in this for, there's that did happen upon us. Was there ever a moment where you thought, I'm going to quit? >> Because well, look, I there's definitely been moments where it's not been easy navigating the ups and downs of of these things. So I'm a person who historically I feel very little when I look at fluctuating prices. That's like one of

my superpowers in kind of trading, right? Like, don't I don't really get emotional about like >> you. >> money going up and down, right? And that's been a strength like as a trader and as as someone, you know, going long-term in crypto, but the individual like upturns and downturns are very psychologically costly, I would say. You know, I you know, and it's just not it's not even just internally for me, but you know like I think at the at the beginning of 25, I had one of my kind of long-time portfolio CEOs call me and was just like a super like depressed state and was like, "Listen, I'm calling you because a lot of the other crypto funds on my cap table like don't exist anymore, and, you

know, I know that you're I know that you you do and you will." And I'm just like been doing this for a long time and like I don't know what it's all Yeah, this kind of Yeah, this this kind of conversation I think it I think it is difficult for entrepreneurs who get locked into a drawn-out bear market like we've seen kind of the last 4 or 5 years. You really need like massive conviction in what you're doing, and you know, and if you don't have that or or maybe maybe that conviction is not warranted based on like what we're working on, you know, I think I think a lot of people kind of quit. And And And all of that is you know, like the VC discipline is it's well understood. It's like you invest in, you know, 25 companies and 23 of them go to go to zero and and like

two of them succeed. That's sort of like the nature of VC, but the realistic like human side of that is you're like going through 23 companies that didn't work out, which all had people who had devoted like years of their lives to it. And the total number of years is like very high. >> Yep. >> And, you know, and like some of them need to go find new jobs. And like it's just that reorganization of things that you know, were tried and weren't successful like is also very psychologically trying and difficult.

Yeah. Yeah. So, but I Let me Let me ask let me answer sort of like you asked me like did you ever want to quit? And and I and I the core of it like I don't want to quit because I know that we haven't really gotten the tech out there yet. Like we're just starting to do it 10 years in, right? So like I'll quit when we get it out there and it fails, but until that happens it's just where we try our stuff, right? And and it's ups and downs. >> Okay. There just because you mentioned the toll that this obviously the space and not only building in the space, but also investing and supporting the people building in the space has on you. Are there any boundaries, non-negotiable

rules that you have now that you did not have in the beginning or how did they kind of >> When you say boundary like in terms of like what we invest into or >> No, just in terms of you being able to maintain your levels of conviction and energy and you know, making sure that you're potentially somebody who these founders when they're having a tough time can come to and discuss what they're going through whether it's hardship or whether they're shutting down or do you have boundaries for your own kind of mental health and well-being?

>> You know, actually kind of no like in the sense that I want to be there especially for portfolio company entrepreneurs. Like we always tell them like we want to be the first call when something goes wrong or something goes right. >> Mhm. >> You know, I've been in a number of difficult situations with founders, whatever it was it was company shutting down or it was a hacking incident or it was a founder schism or you name it, right? It takes you know, significant time 10 years or something like that, right? Working in VC with a very active portfolio to see kind of the gamut of of everything that happens. But I would say like like me personally, like when I make an investment in a company, like I like the

whole ethos of what I do and what our company does is we are very involved, very hands-on. We are company-building people. And so to me, that includes like listening to the founders when they're going through hard stuff. >> Mhm. >> You know, but obviously like the other aspect of that is we've learned the hard way that we got to get the best people in our portfolio, right? Like the people who have the most success are the ones who can navigate all of those ups and downs like very effectively. You know, even if they're first-time founders, like there's certain character traits, right? That that you know, we might see that that might predict success there, right? And so you know, we like where you want to be

spending your time as the investor is on things that are working because oftentimes when things no longer are working, like it's very hard to get that, you know, back on the right track. And so your job is to sort of like make sure that you have like the best entrepreneurs, the best companies to begin with to ensure that as much stuff is working as possible. >> As possible. >> And still it doesn't all fully work cuz it's cuz some of it is like market-dependent. Market says no. Market says this product is not going to work, right? So then you're then you just have to move on. >> You also, and I know that you say you don't have, I don't know, any kind of rules or ways to kind of, let's say, take care of your energy. But you do make art. Do you find that that helps?

Or do you find it cuz we were talking about creativity being one of the ingredients for a good entrepreneur as well, regardless of what the product is. Tell me a little bit about the part of art in your life. >> Yes, sure. As a mathematician and as an investor who, by the way, is somebody who takes care of, you know, the people in the companies that they invest in is is very good and I love hearing that cuz you're the anomaly but in a very good way. But yes, tell me about art. >> Well, I've always been like the pretty dual-brained kind of person. So, you can see a bunch of guitars in the background area of my screen here, right? And you know, my mom was always like big on art.

I did a lot of art in school and so art is one of those things where I can indulge in it and and and and engage in it and I don't have to like make money from it. Just definitely a plus. >> Mhm. >> It's one I have a 4-year-old daughter. She from maybe like 8, 9 months we've been like drawing together. Yeah, she's like super super creative like and so it's always been, you know, that's like one side of my brain and then like the other side of my brain is get like really technical on coding or or, you know, AI. But AI recently doing math together with AI has been amazing. I was like, "Wow, if I had this in grad school, I probably would have done a lot better." Just so good at explaining math to me. But so I've I've found that

throughout my life I've always kind of oscillated, you know, between the the really technical side of my brain and the creative side of my brain. >> Mhm. >> And I go through these phases where I have to like do one or the other to sort of maintain balance. I did a lot of artsy things during the NFT boom. >> You did. >> I actually have like my own NFT creation. >> You do. >> Collection. >> And the gallery. >> And the gallery, you know, >> [clears throat] >> and you know, we work with a bunch of companies like in the space and and still have some of those things in our portfolio today. So, I don't know. It's just kind of a is definitely like a bit of a release for me to just make sure my my brain is is working.

>> It's dope. >> Yeah. >> Nice. Is there anything that you have never shared on any podcast or your writing or anything like that? >> Sure there is. >> Okay. Okay. Okay. But that you would like to share. >> That I would like to share. >> Whether it's about you personally, whether it's a take on what's happening right now, whether it's a piece of advice, whether it's a frustration, like something really annoys is annoying me right now, whatever it is. >> Well, look, I think we mentioned at some point at this podcast on this podcast that it's there's a core set of people who are like in this industry and probably in any industry that like keep it going, right?

>> Mhm. >> I think there's a lot of people in the crypto industry right now that are having they're either like dropping off or they're having an identity crisis or they are just not sure what's happening is what's going on. They're not sure if crypto is going to be a thing. They're not sure if they're like aligned with it philosophically anymore or even if it's just going to like work. And I think my answer to them is, you know, think this is actually like a phenomenal time to sit down and think about being an entrepreneur like in crypto because I do think that there are space is changing and it's maturing and it's different.

But I do think that there are incredible opportunities here. And and maybe like the thing that I want to share is just like and I've gone through this process, right? As an investor, just being like really honest about what has worked and what has not worked. You know, like I remember myself being very um visionary and sort of futurist on like a lot of these things in in in crypto and and I really wanted them to happen. I wanted ICOs to be a thing and I wanted, you know, on-chain finance to be this way and not that way. And I wanted blockchains to be mainstream like we can go through all the different things, right? But I think I think what's important to be happy at the end of the day is to say like look, we all

wanted these things. We we some of these things. The reality is like some of these things haven't worked out, but there are things that are going to work out. And if we're like realistic about those things, and if we want to be an entrepreneur, if we want to raise money, if we want to build, we want to make a team, if we want to make a commercial product, if we want to build a business, like this is actually a phenomenal time to like get yourself together, understand what those realistic things actually are. I can give you some hints, too, shortly. You know, but like just kind of move on, right? And and and do something that like you're happy with, right? And that's Uh that's what I think like more people need to do in this moment where like crypto's just going to change and it's just going to mature and

like it's okay. Like it's just >> Yeah. >> you know, it's okay to work in crypto in its current form, and it's also okay to go and do something else if you want to go do something else, but like there's something that you need to decide for yourself. I personally think like I'm not I'm not pivoting to AI. I'm not starting an AI fund. I'm not starting, you know, a different kind of I'm a crypto fund, and as long as like I tweeted this the other day, as long as CoinFund is funding things like crypto exists, right? So, we'll keep we'll keep we'll keep doing that. I use a great down. I think the things that are that are working, you know, you see again, institutional enterprise adoption. I think on-chain finance will kind of be the first thing, and then DeFi will sort of trickle in after that.

Payments, you know, people are digitizing stocks. There's some excellent companies like Superstate where you could go work in in and really like pioneer like digitizing the whole stock market. Like if you're a finance nerd, like and what could be bigger than that? >> Mhm. >> You know, of the really cool of the things that look the most like crypto and token stuff, I would look at decentralized AI. Decentralized AI is a frontier technology development area, right? It's like we're learning how to train large models in swarms of machines. We're learning how to inference large models on commodity hardware. We're learning how to create open-source harnesses like Hermes agent from News, right? And instead of like instead of proprietary harnesses like

cloud code. So, there's still like a ton of stuff to do there and the technology is that have seen a downturn things like FHE, ZK, these kind of like crypto supply side adjacent technologies, they're actually going to find a lot of use cases like in that area and in those areas. Quantum is a thing. Quantum blockchain is a thing. That's a new frontier technology. It's really interesting. It's like >> So interesting. >> There's there's hardware people who are like very bearish that quantum's not going to do anything for 10 years.

And then there's like software people are like, no, dude, like >> It's going to happen next year. >> It's going to happen next year cuz you don't understand how fast AI is like accelerating the algorithms, right? So, there's just like so much stuff to learn there and apply it, you know, to to blockchain, to crypto. There's incredible opportunities in that space. I mean, even in even in some sense, like like I heard Ali from 16Z tweeting about DAOs 2.0 the other and I'm like, DAOs? Aren't we Didn't we get done with DAOs in 2022? And and actually like if you start thinking about it, if you start coordinating a bunch of AI agents on on blockchains, like DAOs start to make sense again.

>> 100% and the and actually maybe maybe and I've said this before, the problem with DAOs is has always been relational because with the people contributing and participating in it. It's to an extent the human problem of us not necessarily knowing how to relate to each other, how to have conflict, how to resolve conflict, how to not have scarcity mindsets when it comes to the treasury, to the money, to what we do with it, to what we don't do with it. So, I think from that perspective, in my mind at least, the doubts 2.0 will be solved by, okay, to

your point, what is the relational framework between the agents or whatever it is that we uh maybe between agents and humans and then uh creating relational frameworks that actually work. >> All right. >> I think uh we've gone way over, but I appreciate that and I think uh this was a super interesting conversation and thank you so much >> Thank you so much. >> the Human Protocol and sharing your human arc. >> Thank you. Thanks for having me and thanks for a important conversation to have.